“Ireland is in the midst of one of the most severe
recessions in the developed world in decades,” O’Leary said.
“The short-term outlook for gross domestic product is becoming
more irrelevant. The real question is whether Ireland can get
its fiscal house in order.”

The Irish economy is shrinking at the fastest pace in the
euro area as a property slump deepens and unemployment rises at
a record pace. Retail sales plunged the most last year since
1982. The government, grappling with a widening budget deficit,
last week pumped 7 billion euros ($8.9 billion) into Bank of
Ireland and Allied Irish Banks Corp (ALBK) as the lenders grapple with
rising losses on property loans.

The country’s economy will shrink 2.5 percent in 2010 and
the budget deficit, as a proportion of GDP, will reach 12
percent this year and 13 percent in 2010, O’Leary said. That
compares with the European Union limit of 3 percent.